Ofwat proposes new financial support expectations

Ofwat has launched a consultation on proposed changes to how water companies support customers who are struggling to pay their bills.

The payment, help and debt guidelines follow research commissioned by the regulator that showed low awareness of current support and reluctance from customers to ask for help.

With a focus on inclusivity by design, the guidelines are intended to ensure support reaches vulnerable customers and groups within communities.

The new proposed minimum service expectations for all companies include:

• Establish a procedure to know who lives at properties, or if the landlord has responsibility for paying bills
• Offer and accept more frequent bills to encourage customers to pay and avoid unexpected or unaffordable increases
• Offer and encourage billpayers to use digital payments
• Proactively offer alternative tariffs or payment methods where suitable to customers, and encourage people on lower incomes to pay in smaller instalments
• Engage with different customer groups in better ways to understand bills and charges
• Use reasonable efforts to predict and support customers at risk of falling into debt
• Have proactive policies in place to identify people in vulnerable circumstances, and consider data sharing arrangements with energy companies, charities and local authorities to do this
• Make it easy for bereaved relatives to close or amend accounts when a customer dies

Ofwat said the proposed guidelines have been created to strike a balance between allowing companies enough flexibility to manage how they collect money from customers while adding clear reasonable protection for billpayers.

For customers in debt, Ofwat suggests fair and empathetic treatment of the situation and offering alternative payment options. When the company becomes aware that a debtor is actively engaging with a debt advisor, it should stop chasing payments.

The regulator said enforcement action should be viewed as a last resort when all other options are exhausted and should not be used for customers known to be in vulnerable circumstances.

Last month CCW published an independent review of affordability that recommended a single social tariff available nationwide to remove the “postcode lottery” of the current financial support systems.